Digital World (NASDAQ:DWAC) announced late Wednesday that its shareholders have approved amending its charter to allow for automatic three-month extensions of its transaction deadline until September 8, 2023.
This brings to close a long drama during which Digital World adjourned the vote without concluding business six times at different meetings in September, October and November. The issue appeared to primarily be one of low turnout from retail investors unfamiliar with how to vote or unaware they were still the holder of record.
Institutional ownership in the SPAC has ticked up slightly to 9.2% from 7.2% around the last vote attempt on November 3, but the stock remains overwhelmingly retail-owned. Nonetheless, the sixth time was the charm with Digital World reporting 66% of shares of record participated in this vote, 98% of which approved the extension.
With this extension in hand, Digital World can now focus on negotiations with the investors in the deal’s $1 billion PIPE. The SPAC originally announced its buzzy combination with Trump Media and Technology Group on October 20, 2021, and the outside date for PIPE investors passed on September 20.
Some pressure from other outside factors weighing on the deal appear to be lifting. Digital World has been on a steady slide since February after hitting eye-watering highs above $100 at times after its announcement. But, it has been rising over the past week and neared, if not quite eclipsed, its recent September highs, closing at $23.28 on Wednesday.
The announcement that former president and current TMTG Chairman Donald Trump is running for president is the big shoe that has dropped in between the last adjournment and this successful extension. Republicans also appear to have failed to reclaim Congress in the midterms during that period.
That event appeared to be at the top of mind for retail traders. Digital World trading volume topped 33 million on the day before the midterms and 23 million the day of.
Another factor that will likely continue to play off the stock is the ongoing “will he/won’t he” around Trump rejoining his massive following on Twitter. Since buying out Twitter, billionaire Elon Musk has lifted Trump’s ban, but his return to the more established social media platform would undercut the exclusivity of the Trump show over at TMTG.
As for Digital World, this extension means that that the show will go on, with the deals’ initial S-4 under review by the SEC already since May 15.